Will Gold 'Bubble' Burst?
January 25th, 2012 at 4:35:30 PM
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I've been hearing a lot lately that the next bubble
to burst is the gold bubble. Its ripe, according to
Warren Buffet and George Soros, who do this stuff
for a living. Forbes had a good article on it last Aug.
Gold is always a bad investment. I wonder what effect
it'll have on the world economy when it drops $500
an ounce overnight.
to burst is the gold bubble. Its ripe, according to
Warren Buffet and George Soros, who do this stuff
for a living. Forbes had a good article on it last Aug.
Gold is always a bad investment. I wonder what effect
it'll have on the world economy when it drops $500
an ounce overnight.
"It's not called gambling if the math is on your side."
January 25th, 2012 at 4:46:39 PM
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YES! I've had this argument lots of times. At any given time there is always some fad investment, and now it is gold. Before that is was houses. Before that it was the NASDAQ. Before that it was junk bonds and penny stocks. Before that it was gold. I may be missing some periods of time.
If anyone disagrees I have four 1-oz. gold coins I'd like to sell at the fair market price. You'll save about $500 in sales tax.
If anyone disagrees I have four 1-oz. gold coins I'd like to sell at the fair market price. You'll save about $500 in sales tax.
"For with much wisdom comes much sorrow." -- Ecclesiastes 1:18 (NIV)
January 25th, 2012 at 4:57:21 PM
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Quote: WizardAt any given time there is always some fad investment, and now it is gold.
Usually these are sound investments to begin with. They become a fad when the pros drive the market up, and the amateurs dive in to get a quick buck. And that's when the bubble actually happens. A lot of money goes into buying mroe of the current fad, godl in this case, that it keeps going up. But the rationale for investing may be gone by then. So it has to collapse sooner or later.
Donald Trump is a fucking criminal
January 25th, 2012 at 5:20:04 PM
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Quote: WizardBefore that is was houses.
Just talked to a friend in Sant Cruz last night.
Their house was bought for 1.5mil in 2007
and was down to 900K when they bought it
in 2010. Now its down to 700K and he's fit
to be tied. And its not even that big, 3500sqft.
The same thing will happen to gold. There's
3-4 reality shows on now about gold mining,
they'll be gone overnight when the big correction
comes.
"It's not called gambling if the math is on your side."
January 25th, 2012 at 5:22:45 PM
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Hmmm good topic. Several years ago (2008 I think?) I decided to buy some precious metals, not necessarily as an investment (long-term or short-term) but more as a hedge against future super-inflation and disaster-scale economic collapse. My (admittedly shallow) reasoning being, if shit seriously hits the fan and our dollars are suddenly useless, I'll have something to barter with. Never mind that I own 2 100oz bricks of silver (these are massive bricks) and 2 1oz strips of gold, which are impractical for bartering with since they represent so much money.
I bought in at $906/oz for gold and $12.84/oz for silver, so I could sell now at a tidy profit. But, I'm going to stick to my original plan and hold on to them for the long haul. I agree that gold is probably going to crash in the near future...if I had an investment account I might consider shorting a gold ETF, but this is a bit of an advanced financial play for a stock market n00b like me. Not even sure if it's possible.
With regard to my stated purpose for holding on to the metals, a lot of people make fun of me, saying in a disaster scenario in modern day, gold and silver won't be worth anything. Compared to the olden days, when they were used for currency quite readily in the absence of government-regulated fiat money. I agree this is a possibility, but something tells me the historical value of these metals will hold up.
Now, about that post-apocalyptic future...on my list of 2012 NY resolutions was to learn how to fire a handgun and purchase one. Probably a better investment than the gold and silver anyway.
I bought in at $906/oz for gold and $12.84/oz for silver, so I could sell now at a tidy profit. But, I'm going to stick to my original plan and hold on to them for the long haul. I agree that gold is probably going to crash in the near future...if I had an investment account I might consider shorting a gold ETF, but this is a bit of an advanced financial play for a stock market n00b like me. Not even sure if it's possible.
With regard to my stated purpose for holding on to the metals, a lot of people make fun of me, saying in a disaster scenario in modern day, gold and silver won't be worth anything. Compared to the olden days, when they were used for currency quite readily in the absence of government-regulated fiat money. I agree this is a possibility, but something tells me the historical value of these metals will hold up.
Now, about that post-apocalyptic future...on my list of 2012 NY resolutions was to learn how to fire a handgun and purchase one. Probably a better investment than the gold and silver anyway.
"So drink gamble eat f***, because one day you will be dust." -ontariodealer
January 25th, 2012 at 5:23:06 PM
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DUHHIIIIIIIII HEARD THAT!
January 25th, 2012 at 5:24:57 PM
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Quote: WizardIf anyone disagrees I have four 1-oz. gold coins I'd like to sell at the fair market price. You'll save about $500 in sales tax.
Wiz, what kind of coins are they?
I may be interested in making this transaction with you when I visit Las Vegas in March. I would be hesitant to put something of such value in the mail.
If I'm still interested when the time grows closer, I'll get in touch with you.
"So drink gamble eat f***, because one day you will be dust." -ontariodealer
January 25th, 2012 at 5:56:47 PM
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What gold bubble?
Gold is the traditional standard currency. Its fall has been due to the rise of US Dollar and later Euro. They became stable, solid, reliable currencies and gold just wasn't needed in that way.
In this day and age, what fiat currency can you call solid?
Until there is one, gold will keep a high value as a currency everyone agrees to be solid.
There is some overvaluing going on, since every investor understands the above, but there is no bubble, and so there is nothing to burst. Everyone knows gold will go down once currencies go up in stability. Mid-term players hope to jump off before the hump. Long-term gold bulls hope that it climbs further and they are still ahead after it drops.
Over the long term, gold isn't going to be as profitable as stocks, simply because it isn't really an investment. The term "investment" has been subverted and perverted by speculators over the years. You invest in things that create value to capitalize on the added value.
Buying suburban homes is not an investment, an illusion many homegrown "investors" were misled to believe (and got burned on), it's pure speculative trading. If the above sounds like heresy to you, consider this - suburban homes are a consumer product just like Nike Air Jordans, and you wouldn't consider the latter a true investment.
Buying gold is not an investment either. It's exchange of currency to a more solid form, 'the currency of currencies', and it's actually more like selling your stocks (except now you sell your currency). Speculators often get high return or negative return, their activity is little more than gambling. Gold is a hedge against the economy going south. It can get hotter at times, because speculators do short-term plays with gold as well, but it doesn't burst and it doesn't burn long-term players.
Gold is the traditional standard currency. Its fall has been due to the rise of US Dollar and later Euro. They became stable, solid, reliable currencies and gold just wasn't needed in that way.
In this day and age, what fiat currency can you call solid?
Until there is one, gold will keep a high value as a currency everyone agrees to be solid.
There is some overvaluing going on, since every investor understands the above, but there is no bubble, and so there is nothing to burst. Everyone knows gold will go down once currencies go up in stability. Mid-term players hope to jump off before the hump. Long-term gold bulls hope that it climbs further and they are still ahead after it drops.
Over the long term, gold isn't going to be as profitable as stocks, simply because it isn't really an investment. The term "investment" has been subverted and perverted by speculators over the years. You invest in things that create value to capitalize on the added value.
Buying suburban homes is not an investment, an illusion many homegrown "investors" were misled to believe (and got burned on), it's pure speculative trading. If the above sounds like heresy to you, consider this - suburban homes are a consumer product just like Nike Air Jordans, and you wouldn't consider the latter a true investment.
Buying gold is not an investment either. It's exchange of currency to a more solid form, 'the currency of currencies', and it's actually more like selling your stocks (except now you sell your currency). Speculators often get high return or negative return, their activity is little more than gambling. Gold is a hedge against the economy going south. It can get hotter at times, because speculators do short-term plays with gold as well, but it doesn't burst and it doesn't burn long-term players.
Resist ANFO Boston PRISM Stormfront IRA Freedom CIA Obama
January 25th, 2012 at 6:37:27 PM
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War with Iran might keep gold from sinking, otherwise it is quite overdue IMO and might go down as low as $900 an oz. I have sold all my gold stocks and some of my energy stocks [etf's]. Natural gas has tanked due to oversupply and I think it will keep oil from jacking too high even if world economies take off. It will go up though. My bet for oil in the short term is a dip, but I havent bet much on that, trying to time it is too hard. Gold, though: I'm out after a long ride.
the next time Dame Fortune toys with your heart, your soul and your wallet, raise your glass and praise her thus: “Thanks for nothing, you cold-hearted, evil, damnable, nefarious, low-life, malicious monster from Hell!” She is, after all, stone deaf. ... Arnold Snyder
January 25th, 2012 at 6:40:14 PM
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Gold is not a fad. It's been sought after throughout time. It brought conquistidores to the country, and it's the reason east-coasters spread over to California and to Alaska. Gold will always be popular.
"Poker sure is an easy game to beat if you have the roll to keep rebuying."
January 25th, 2012 at 6:49:15 PM
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My dad buys as much silver as he can and I have a modest amount (maybe 30 ounces). His reason is just in case the economy completely crashes. He also has a stock pile of rum and tequila for trading purposes, which have also been valuable throughout history.
I heart Crystal Math.
January 25th, 2012 at 7:25:28 PM
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Quote: EvenBobI've been hearing a lot lately that the next bubble
to burst is the gold bubble. Its ripe, according to
Warren Buffet and George Soros, who do this stuff
for a living. Forbes had a good article on it last Aug.
Gold is always a bad investment. I wonder what effect
it'll have on the world economy when it drops $500
an ounce overnight.
Gold is not in a bubble. The price will only go up. The central banks cannot manipulate the gold prices like in the 80's because of the change in world economics. China has 3 trillion dollars to spend and they have been buying up gold on the sly. They will keep accumilating. The price of gold is stable, it is the value of fiat currency that changes or rather the confidence in the fiat currency. China used to be a net exporters of 100 million oz of silver and they are now a net importer of 150 million oz. Look around and try to buy any large amount of silver, it is not to be found.
BTW, any transaction over $1000 in purchasing gold or silver, there are no sales tax. Thank the elite.
Edward Snowden is not the criminal, the government is for violating the constitution!
January 25th, 2012 at 7:33:13 PM
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Quote: AceCrAAckersGold is not in a bubble. .
"George Soros, the billionaire who two years ago called gold the “ultimate asset bubble,” cut 99 percent of his holdings (in gold) in the first quarter."
"It's not called gambling if the math is on your side."
January 25th, 2012 at 7:37:50 PM
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Quote: EvenBob"George Soros, the billionaire who two years ago called gold the “ultimate asset bubble,” cut 99 percent of his holdings (in gold) in the first quarter."
Did he ” cut 99 percent of his holdings (in gold) in the first quarter," two years ago? How that move work out for him so far?
Edward Snowden is not the criminal, the government is for violating the constitution!
January 25th, 2012 at 7:38:50 PM
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Quote: AceCrAAckersLook around and try to buy any large amount of silver, it is not to be found.
There are heaps of silver coins on Ebay.
But, for some reason they don't seem to appreciate at the same rate as the actual metal price.
萬歲言論自由。
January 25th, 2012 at 7:41:48 PM
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Quote: AceCrAAckersDid he ” cut 99 percent of his holdings (in gold) in the first quarter," two years ago?
The article was written in Dec, so it was a year ago.
Do you think the smart investors wait till the day
before it happens to get out?
"It's not called gambling if the math is on your side."
January 25th, 2012 at 7:44:12 PM
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Quote: victorimmatureThere are heaps of silver coins on Ebay.
But, for some reason they don't seem to appreciate at the same rate as the actual metal price.
There is a disconnect between spot price and physical price. Check Ebay and you will find this. Also, look on Craiglist and people are looking to buy silver, there aren't very many sellers. 20 years ago, go to any flea market and you could find silver coins all over the place, now most flea markets have zero booths selling silver coins.
Edward Snowden is not the criminal, the government is for violating the constitution!
January 25th, 2012 at 7:54:54 PM
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Look familiar? I bet it's down to 1000-1200 by June
January 25th, 2012 at 7:56:25 PM
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The housing bubble was debt driven and cannot be compared to commodity pricing. To invest in gold is to take the position that our government and the fed will continue to devalue the dollar. Judging by the state of the union address last night and multiple other indicators, it appears that the powers that be have decided to do just that. Our agreements with OPEC are becoming strained. Many countries (not just China) are seeking a new reserve currency. All these things are increasingly dollar negative/gold positive.
100% risk of ruin
January 25th, 2012 at 7:59:50 PM
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Quote: Triplell
Look familiar? I bet it's down to 1000-1200 by June
I'll take the bet. If it goes down to 1200 by June, I'll pay you that amount else you buy me 1 oz of gold.
Edward Snowden is not the criminal, the government is for violating the constitution!
January 25th, 2012 at 8:23:15 PM
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It doesn't have to go down to 1200, at 1400 people
will be losing a huge amount of money. Its doing
just what they said it would, it went up $40 today,
its being erratic. The quys who forecast things know
how it works because they've been involved for
decades with metals prices.
will be losing a huge amount of money. Its doing
just what they said it would, it went up $40 today,
its being erratic. The quys who forecast things know
how it works because they've been involved for
decades with metals prices.
"It's not called gambling if the math is on your side."
January 25th, 2012 at 8:47:40 PM
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Quote: AceCrAAckersChina has 3 trillion dollars to spend and they have been buying up gold on the sly.
Then how is it you know about this?
"Poker sure is an easy game to beat if you have the roll to keep rebuying."
January 25th, 2012 at 9:19:22 PM
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Quote: AcesAndEightsCompared to the olden days, when they were used for currency quite readily in the absence of government-regulated fiat money. I agree this is a possibility, but something tells me the historical value of these metals will hold up.
Something is seriously wrong with the production of the new $100 banknote. As you may know the original plan was to begin producing a new note 10 years after they began producing the big headed $100 banknote in October 1995.
A series of expensive delays resulted, until they finally decided it would be a 2009 series with Secretary Geithner's signature on the note. Even more delays meant that actual production didn't begin until 14 months after the Obama inauguration. Over a billion notes were produced in fiscal year 2010 (ends Sep 30 2010). They have been declared physically incapable of being circulated because of serious flaws in the notes.
Over the next 10 months no improvement was reported. They began reprinting the old 2006 series in January 2010. As of July 2011 no production numbers have been released with the only note Please pardon our delay in posting monthly production reports while we transition to a new data management system.
Secretary of Treasurer Geithner will not be serving past next year, regardless if Obama is re-elected. There is no way they are going to release these 2009 notes in 2013 or later with Geithner's signature. I also doubt if the notes can be efficiently sorted to remove the bad ones.
In short, I expect them to make an announcement that they will be starting over with a new production. They may even try something radical like joining much of the world in printing a polymer banknote. As there are over $700 billion in notes to replace it takes a while to build up a stockpile. The biggest production run of $100 banknotes in history was $29 billion in one month, but numbers well under $10 billion are more common.
The bottom line is that they can keep on printing the old 2006 notes for a long time. But the current design is almost two decades old, which is long after the recommended period of keeping a modern currency as a decent safeguard against counterfeiting.
Let's keep in mind that there doesn't actually have to be a lot counterfeits circulating. There has to be just enough so that people don't trust the currency.
At least a half a trillion dollars in $100 banknotes is circulating overseas. If there is widespread distrust of the $100 banknote, then the world will turn to other fiat currencies. However, I think that gold coins will once again become popular to fill in the gap. If gold reaches $3,110 per ounce then gold will be worth the same as $100 bills in weight. I think that long before that the concern about carrying around a box of gold and a box of $100 banknotes because of their weight will be overtaken by events.
| Calendar | $billions of $100 | weight of banknotes in tons |
|---|---|---|
| 2010 | $704.60 | 77,506 |
| 2009 | $656.40 | 72,204 |
| 2008 | $625.00 | 68,750 |
| 2007 | $569.30 | 62,623 |
| 2006 | $564.10 | 62,051 |
| 2005 | $545.00 | 59,950 |
| 2004 | $516.70 | 56,837 |
| 2003 | $487.80 | 53,658 |
| 2002 | $458.70 | 50,457 |
| 2001 | $421.10 | 46,321 |
| 2000 | $377.70 | 41,547 |
| 1999 | $386.20 | 42,482 |
| 1998 | $320.10 | 35,211 |
| 1997 | $291.60 | 32,076 |
| 1996 | $261.40 | 28,754 |
| New | Design | Big Head |
| 1995 | $241.50 | 26,565 |
| 1994 | $229.10 | 25,201 |
| 1993 | $201.50 | 22,165 |
| 1992 | $177.10 | 19,481 |
| 1991 | $157.20 | 17,292 |
| 1990 | $140.20 | 15,422 |
January 26th, 2012 at 2:02:59 AM
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Quote: pacomartinIf gold reaches $3,110 per ounce then gold will be worth the same as $100 bills in weight. I think that long before that the concern about carrying around a box of gold and a box of $100 banknotes because of their weight will be overtaken by events.
You don't really need to carry gold around. It's enough to keep your money in a gold account and withdraw in the local currency as needed. That way you won't be incurring costs associated with physical exchange of metals.
Resist ANFO Boston PRISM Stormfront IRA Freedom CIA Obama
January 26th, 2012 at 3:32:37 AM
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Quote: P90You don't really need to carry gold around. It's enough to keep your money in a gold account and withdraw in the local currency as needed. That way you won't be incurring costs associated with physical exchange of metals.
You are missing my point.
You don't really need to carry around $100 banknotes either. You can just do electronic transactions for most legitimate ordinary purchases. But the US $100 banknote, along with the 500 Euro note fuels much of the questionable transactions in the world. That often involves the anonymous transaction of something of extreme value.
I am just pointing out something that is happening right now, which does not involve global apocalypse or the complete crash of currency, but still predicts the increased demand for physical gold coins.
If you think that I am being paranoid, there are many places in the world that won't accept the 2003 series $100 banknotes with the signature of John W. Snow the second of Bush's three Secretaries of the Treasury. Secretary Snow only resigned 5.5 years ago. The reason for refusing these bills is the widespread belief that they were counterfeited with a supernote. In the interim the BEP has printed many banknotes of 2006 series with the signature of Secretary Henry Paulson. But it took over three years of production to produce the required 7 billion notes.
As I said earlier the BEP resumed production of the Henry Paulson banknotes to keep up with demand. But they have stopped posting the production figures since last July to obscure the fact that the new color 2009 Geithner banknotes are still in trouble.
Canada is printing a new polymer $100 banknote, but their total circulation is less than 1/3 billion notes. The Euro is useful, but many notes are currently being used. The gold coin may go into wider circulation to fuel the need for physical currency around the world.
January 26th, 2012 at 3:34:20 AM
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Quote: P90You don't really need to carry gold around. It's enough to keep your money in a gold account and withdraw in the local currency as needed. That way you won't be incurring costs associated with physical exchange of metals.
Personally, I have a thing about total liquidity at all times, probably one reason I don't like investing in real estate. So for years I had money in a fund that invested in gold mines, silver mines, etc. I did that purely as a hedge against bonds I was buying, but gold was less than $500/oz then [I clearly remember getting excited about it going 'way up' to $500]. The run I got till now was unbelievable. I am out now and will get back in if it goes down enough; this time I will find an ETF to invest in.
the next time Dame Fortune toys with your heart, your soul and your wallet, raise your glass and praise her thus: “Thanks for nothing, you cold-hearted, evil, damnable, nefarious, low-life, malicious monster from Hell!” She is, after all, stone deaf. ... Arnold Snyder
January 26th, 2012 at 4:10:28 AM
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What doesn't make sense to me regarding the current price is that it costs only about $400 to mine an ounce of gold. Ultimately, gold is only worth something because people think it is. It will always have value in electronics and jewelry, so I'm not saying it will ever go much below $400. I'm only 46, but have seen a number of fad investments pop before, and this bubble just seems ready to pop to me. In all fairness, I've been saying that for at least a year, so I don't claim my timing is perfect.
Let me throw this out there -- within three years, probably much less, gold will be under $500 oz..
I have two Gold Eagles, one Maple Leaf, and one Kuggerand (sp?). I agree that the value is too much to handle through the mail. I'd be happy to meet a buyer in Vegas.
Let me throw this out there -- within three years, probably much less, gold will be under $500 oz..
Quote: AcesAndEightsWiz, what kind of coins are they?
I have two Gold Eagles, one Maple Leaf, and one Kuggerand (sp?). I agree that the value is too much to handle through the mail. I'd be happy to meet a buyer in Vegas.
"For with much wisdom comes much sorrow." -- Ecclesiastes 1:18 (NIV)
January 26th, 2012 at 4:36:43 AM
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Glenn Beck told him so :)Quote: zippyboyThen how is it you know about this?
Someday, joor goin' to see the name of Googie Gomez in lights and joor goin' to say to joorself, "Was that her?" and then joor goin' to answer to joorself, "That was her!" But you know somethin' mister? I was always her yuss nobody knows it! - Googie Gomez
January 26th, 2012 at 5:56:19 AM
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Quote: WizardLet me throw this out there -- within three years, probably much less, gold will be under $500 oz.
I don't see that kind of confidence returning to fiat currency.
The price of gold is based on emotion, much more than most things in life. You can say it is ridiculous, and I won't disagree, but I don't think it will vanish.
My guess is that it will pass $2K.
January 26th, 2012 at 6:01:43 AM
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Quote: WizardWhat doesn't make sense to me regarding the current price is that it costs only about $400 to mine an ounce of gold.
But to do that, you have to start with a gold mine. These aren't quite lying around.
Quote: WizardUltimately, gold is only worth something because people think it is.
So are pieces of rag paper with numbers printed on them. Much more so. They cost less to print, too.
The exchange rate between two commodities that are only worth something because people think they are is going to determined by the faith people have in these commodities. And right now, the faith in rag paper has tanked. Not only are there two kinds of it, if you don't count Yuan, but neither of the economies they are backed by is in particularly good shape.
I would easily take an even money future bet that gold will stay above $500 in 4 years, and above $750 while at that.
Resist ANFO Boston PRISM Stormfront IRA Freedom CIA Obama
January 26th, 2012 at 7:07:08 AM
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Quote: pacomartinQuote: WizardLet me throw this out there --within three years, probably much less, gold will be under $500 oz.
My guess is that it will pass $2K.
No reason you can't both be right. It'll test $2k/oz in September and October as uncertainty about the U.S. Presidential election affects the markets, and it'll crater in 30 months after U.S. and European sovereign debt markets stabilize.
"So as the clock ticked and the day passed, opportunity met preparation, and luck happened." - Maurice Clarett
January 26th, 2012 at 7:15:38 AM
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Quote: WizardWhat doesn't make sense to me regarding the current price is that it costs only about $400 to mine an ounce of gold. Ultimately, gold is only worth something because people think it is. It will always have value in electronics and jewelry, so I'm not saying it will ever go much below $400. I'm only 46, but have seen a number of fad investments pop before, and this bubble just seems ready to pop to me. In all fairness, I've been saying that for at least a year, so I don't claim my timing is perfect.
Let me throw this out there -- within three years, probably much less, gold will be under $500 oz..
Historically, gold and silver equities leveraged the returns on gold. In 2011, mining companies were producing gold at an average cash cost just under $600/ounce (oz) and were getting about $1,600/oz in revenue. Cash flows are very impressive and price earnings are healthy. Mining companies continue to buy juniors with good assets, especially at these low share-price values. I moved into the sector to take advantage of this bull market in gold. And, I believe we will see a mania in junior mining stocks before this is over.
I think we will see this happen within the next two years as people begin to realize that solutions to the global economic situation are not forthcoming. There will be more and more nervousness and gold will find a larger and larger audience.
We now have a situation where central banks, which were net sellers of gold for 20 years, became net buyers in 2009 and are accelerating their buying programs. We are seeing tremendous support for gold from central banks, institutional and retail investors across the world
January 26th, 2012 at 7:19:27 AM
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Quote: WizardWhat doesn't make sense to me regarding the current price is that it costs only about $400 to mine an ounce of gold. Ultimately, gold is only worth something because people think it is.
Not exactly. Gold is worth something because people desire to own gold. It works as currency becasue it's homogenous, hard to counterfeit, in limited supply, easy to divide, easy to carry and it's durable. Better yet, unlike earlier currencies such as salt (seriously!), you don't need to use it up to extract value from it.
Donald Trump is a fucking criminal
January 26th, 2012 at 7:31:01 AM
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Breaking news!!!!! Central Banks and the Federal Reserve will no longer be printing currencies. Sell all your gold and silver before you run out of chance to get hold of these Federal Reserve Notes or Euro, Yen, Zimbabwe 100 trilliion dollar notes etc....
Bank notes are in a bubble, not the other way around. All previous fiat currencies failed! It is a mathametical certainity that the dollar will fail. It is a question of when, not if?
Bank notes are in a bubble, not the other way around. All previous fiat currencies failed! It is a mathametical certainity that the dollar will fail. It is a question of when, not if?
Edward Snowden is not the criminal, the government is for violating the constitution!
January 26th, 2012 at 7:45:44 AM
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Quote: AceCrAAckersBreaking news!!!!! Central Banks and the Federal Reserve will no longer be printing currencies. Sell all your gold and silver before you run out of chance to get hold of these Federal Reserve Notes or Euro, Yen, Zimbabwe 100 trilliion dollar notes etc....
Bank notes are in a bubble, not the other way around. All previous fiat currencies failed! It is a mathametical certainity that the dollar will fail. It is a question of when, not if?
Sure. And then? Gold sales are dollar denominated. While the value of gold may be unchanged, the price of gold will be very much affected. The price of gold is all that really matters...
"So as the clock ticked and the day passed, opportunity met preparation, and luck happened." - Maurice Clarett
January 26th, 2012 at 7:49:26 AM
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Quote: AceCrAAckersBank notes are in a bubble, not the other way around. All previous fiat currencies failed! It is a mathametical certainity that the dollar will fail. It is a question of when, not if?
I would like to differentiate what I am saying from the above statement. If counterfeiting causes widespread concern about the American $100 banknote, the legal domestic economy will be greatly inconvenienced but it won't be shattered. It's just that transactions like selling used cars will take longer as some form of electronic payment will be needed, or some transactions will be conducted with fistfuls of $20 banknotes.
What I am saying is that the Treasury and the BEP are failing in their core duty to keep the currency updated so that they are a step ahead of the counterfeiters. They could create a worldwide demand for other currencies if there is a major counterfeiting scare. This demand will be met by a combination of other fiat currencies and gold coins.
It's not an absolute. Counterfeiting scares will never strip all value from the $100 banknote; but such scares just might stop the exponential growth in banknote distribution.
January 26th, 2012 at 8:21:05 AM
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Quote: P90I would easily take an even money future bet that gold will stay above $500 in 4 years, and above $750 while at that.
Too bad we don't trust other. Otherwise, I would be happy to bet the under $750.
Quote: P90So are pieces of rag paper with numbers printed on them. Much more so. They cost less to print, too.
That's true. You could say that about anything. Perhaps Paco could produce a handy chart to prove this, but it seems to me that over the long run the price of gold has been around what it costs to mine it. There has been the spikes here and there when we wring our hands about this or that. However, there has never been a better era to be alive. Once we see that the global economy is back on track, and its getting there, the bubble will pop.
"For with much wisdom comes much sorrow." -- Ecclesiastes 1:18 (NIV)
January 26th, 2012 at 8:45:13 AM
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Wiz-
I do not think Gold will go that low in the near future. I believe that it will stay between 1000-2000 for a while, Here is my thinking, and it's very simplistic:
USD will make gold go down if our economy grows by leaps and bounds(not likely soon,IMHO)
OR
Continued uncertainty in Europe and growth in India and China will keep the demand high
So either way i don't see the big dive. But I do see the "bubble".........
You never really know, until it it said and done.
I find the recent volatility in silver much more interesting, +/- ~30% this last year alone.
I do not think Gold will go that low in the near future. I believe that it will stay between 1000-2000 for a while, Here is my thinking, and it's very simplistic:
USD will make gold go down if our economy grows by leaps and bounds(not likely soon,IMHO)
OR
Continued uncertainty in Europe and growth in India and China will keep the demand high
So either way i don't see the big dive. But I do see the "bubble".........
You never really know, until it it said and done.
I find the recent volatility in silver much more interesting, +/- ~30% this last year alone.
January 26th, 2012 at 9:11:24 AM
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I find the recent volatility in silver much more interesting, +/- ~30% this last year alone.
Silver is manipulated. The price is controlled via naked short, etf. The amount of paper silver traded every day amounts to over a year worth of production. Once the price of silver, copper and gold increases, then the sheeple will see what has happened to the fiat currency. The emperor has no clothes.
The price of silver and copper has to be kept low because of the fact that they have been used in coinage. Pre 1965 dimes, quarters, half have 90% silver. The melt value of a quarter is $6.03 at todays spot price of $33.38. If silver rose to the historic 15:1 of gold then it would be at $116 an oz. That silver quarter would be worth $20.90.
Most of us are not alive when gold coins were used as money but there are many still around that remember using silver coins.
Silver is manipulated. The price is controlled via naked short, etf. The amount of paper silver traded every day amounts to over a year worth of production. Once the price of silver, copper and gold increases, then the sheeple will see what has happened to the fiat currency. The emperor has no clothes.
The price of silver and copper has to be kept low because of the fact that they have been used in coinage. Pre 1965 dimes, quarters, half have 90% silver. The melt value of a quarter is $6.03 at todays spot price of $33.38. If silver rose to the historic 15:1 of gold then it would be at $116 an oz. That silver quarter would be worth $20.90.
Most of us are not alive when gold coins were used as money but there are many still around that remember using silver coins.
Edward Snowden is not the criminal, the government is for violating the constitution!
January 26th, 2012 at 9:14:07 AM
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On a related topic, suppose I find a buyer for my four gold coins. Let's use the American Eagle as an example. What would be a fair price relative to the spot price of gold? Don't they sell about $50 above the spot price, perhaps for the silver content, or production costs?
"For with much wisdom comes much sorrow." -- Ecclesiastes 1:18 (NIV)
January 26th, 2012 at 9:24:10 AM
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I have no expertise at all in this area, but I too suspect that the price of gold will fall from its current level. However, I am skeptical that it will drop to $500/oz. in the next three years without some extreme and unexpected turn of events -- synthetic gold, anyone?Quote: WizardLet me throw this out there -- within three years, probably much less, gold will be under $500 oz.
Can you short a sale of gold? What's the time limit on resolving such short sales? It would seem that there could be some market in which the Wizard could get action on his throw-this-out-there belief.
January 26th, 2012 at 9:48:25 AM
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Of course you can. You can make bets on the price movement of any item in the market. It is the world's largest casino -- puts Macau, Vegas, and Singapore to shame.Quote: DocCan you short a sale of gold? What's the time limit on resolving such short sales? It would seem that there could be some market in which the Wizard could get action on his throw-this-out-there belief.
I admit I don't know the specifics, so I would talk to a broker or someone more experienced in these areas.
"Dice, verily, are armed with goads and driving-hooks, deceiving and tormenting, causing grievous woe." -Rig Veda 10.34.4
January 26th, 2012 at 10:00:03 AM
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Easiest way to short gold is to short or buy puts in one of the gold holding ETFs, such as GLD. It's not perfect correlation, but it's close enough.
I recently sold my GLD calls that I bought a month ago. My timing could have been better but oh well. I should have anticipated the Fed move. On to the next trade :)
I recently sold my GLD calls that I bought a month ago. My timing could have been better but oh well. I should have anticipated the Fed move. On to the next trade :)
January 26th, 2012 at 10:52:03 AM
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Quote: WizardOn a related topic, suppose I find a buyer for my four gold coins. Let's use the American Eagle as an example. What would be a fair price relative to the spot price of gold? Don't they sell about $50 above the spot price, perhaps for the silver content, or production costs?
Sahara Coins based on Gold: $1662.20
American Gold Eagle (PFT) rounds up the price to nearest dollar, adds $15 and will buy them for $1,678
But they sell them for an additional $134 or $1,812.
That gives you a pretty firm $134 range for the coins. Why would the seller sell it for less than he can sell it at the store? And why would a buyer purchase it for more than he can purchase at the store. It would seem that the 'spot price' + $50 or $1777.60 is a fair price for a private transaction done in cash.
Coins are always sold for more than the spot price because they are a specified weight and they are easy to exchange for goods and services. If you are selling a small ingot, then I would pay the spot price.
Sahara coins is the sole authorized dealer in the Las Vegas area.
January 26th, 2012 at 12:11:02 PM
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Quote: pacomartinSahara Coins based on Gold: $1662.20
American Gold Eagle (PFT) rounds up the price to nearest dollar, adds $15 and will buy them for $1,678
But they sell them for an additional $134 or $1,812.
Thanks Paco, good answer. So, if anyone is interested I'll sell for $50 above the spot price per coin. Compared to a store you'll save $84 plus sales tax.
"For with much wisdom comes much sorrow." -- Ecclesiastes 1:18 (NIV)
January 26th, 2012 at 12:30:36 PM
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1. It may have cost $500 an oz to mine in 2008 or 2009, but in 2012, I suspect it costs closer to $700 per oz to mine. It's tough to say, since the only answers readily available come from Answers.com - a very unreliable source.
2. Yes I remember those hot tech and dot come stocks like Google, Yahoo, Apple, and Microsoft that were such a fad. As a matter of fact, I still own them. (My father in-law razzed me over the Google stock saying, "They have no assets! They have nothing! Just office furniture! Where's the value?".
3. Crisis with the Euro, a weak dollar in my mind = Gold Value.
4. If the democrats happen to take the presidency again in 2012, the run away spending will continue, the dollar will continue to weaken, and the demand for gold will continue to soar.
It may seem as though it's a fad to buy gold here in America, but in 2011- 2012 the biggest buyers are currently outside of the US. In China and abroad they don't see it as a fad. They see the dollar fading from the world's currency. They are continuing to buy.
FYI: I am NOT a doom and gloom guy. On the contrary I believe the best is yet to come and I want the best for my fellow man and country. I would like to see everything turn around, but we all must face reality for the next 10 years.
By the way, copper pennies anyone?
-Keyser
2. Yes I remember those hot tech and dot come stocks like Google, Yahoo, Apple, and Microsoft that were such a fad. As a matter of fact, I still own them. (My father in-law razzed me over the Google stock saying, "They have no assets! They have nothing! Just office furniture! Where's the value?".
3. Crisis with the Euro, a weak dollar in my mind = Gold Value.
4. If the democrats happen to take the presidency again in 2012, the run away spending will continue, the dollar will continue to weaken, and the demand for gold will continue to soar.
It may seem as though it's a fad to buy gold here in America, but in 2011- 2012 the biggest buyers are currently outside of the US. In China and abroad they don't see it as a fad. They see the dollar fading from the world's currency. They are continuing to buy.
FYI: I am NOT a doom and gloom guy. On the contrary I believe the best is yet to come and I want the best for my fellow man and country. I would like to see everything turn around, but we all must face reality for the next 10 years.
By the way, copper pennies anyone?
-Keyser
January 26th, 2012 at 12:39:56 PM
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When we get into mining asteroids, which is coming,
they're likely to find some that are mostly gold. What
then, it will make our gold worthless overnight.
they're likely to find some that are mostly gold. What
then, it will make our gold worthless overnight.
"It's not called gambling if the math is on your side."
January 26th, 2012 at 12:47:49 PM
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Quote: EvenBobWhen we get into mining asteroids, which is coming,
they're likely to find some that are mostly gold. What
then, it will make our gold worthless overnight.
I'll worry about that when I'm 65 and space exploration is that common place. I think I'm being optimistic at 30 year window as well. Right now, man is much more earth bound and earth centric.
"Then you can admire the real gambler, who has neither eaten, slept, thought nor lived, he has so smarted under the scourge of his martingale, so suffered on the rack of his desire for a coup at trente-et-quarante" - Honore de Balzac, 1829
January 26th, 2012 at 1:01:21 PM
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Quote: WizardCompared to a store you'll save $84 plus sales tax.
Did you really pay sales tax for what is essentially a bullion purchase? I trade silver a lot more than I ever trade gold but I don't think gold will fall back below 1,000 It has a large variety of participants that are all buying for different reasons. You should ALWAYS fade central banks as they tend to sell the dead lows a top tick the buys. Gold has not gone parabolic yet and I really need to see that behavior to really get a bubble.
If you want to express your gold opinion and make some serious $$ buy some long dated puts on GLD they will be relatively cheap and if you are right you would probably see a 50:1 payoff minimum.
when man determined to destroy himself he picked the was of shall and finding only why smashed it into because."
— E.E. Cummings
January 26th, 2012 at 1:16:19 PM
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We're a long way from mining asteroids, actually, a very long way.
There are several issues, of course: setting up a mine in zero gravity; the extraction itself; travel from the asteroid to the planet and from the planet to the asteroid, and landing a full freighter through an atmosphere.
I'd say at least 80 years before you could come up with something viable that could mine. The rate of transfer of these minerals won't make any market price go down, and the mining company would not have any interest in mining at a rate that would bring the value of the mineral below its production costs. I really doubt for example that you would be able to mine gold on an asteroid at anything short of about $10K/oz.
Plus, asteroids are moving. Some thing that is close by today may not be close for 10s of years again.
There are several issues, of course: setting up a mine in zero gravity; the extraction itself; travel from the asteroid to the planet and from the planet to the asteroid, and landing a full freighter through an atmosphere.
I'd say at least 80 years before you could come up with something viable that could mine. The rate of transfer of these minerals won't make any market price go down, and the mining company would not have any interest in mining at a rate that would bring the value of the mineral below its production costs. I really doubt for example that you would be able to mine gold on an asteroid at anything short of about $10K/oz.
Plus, asteroids are moving. Some thing that is close by today may not be close for 10s of years again.
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You want the truth! You can't handle the truth!
